Prologis has formally reached agreement with the board of Segro on the terms of a recommended acquisition, ending a monthslong takeover pursuit and setting up one of the largest real estate deals in recent European history, valuing the UK’s largest listed landlord at approximately $18.8 billion.
From Rejection to Recommendation
The deal caps off a drawn-out courtship in which Segro’s board rejected three previous proposals from Prologis between late June and late July, dismissing the U.S. logistics giant’s opening bids as insufficient. Prologis ultimately prevailed by raising its offer to what it described as a “best and final” proposal, valuing Segro at £14 billion, a 9.5% increase over its initial June 24 offer and a 47% premium to Segro’s three-month weighted average share price. Segro’s board unanimously concluded the improved terms merited recommendation to shareholders, formally announcing the agreement on Tuesday.
The Terms of the Deal
Under the agreed terms, Segro shareholders will receive 0.0920 new Prologis shares for each Segro share they hold, with the option to elect cash in lieu of some or all of that stock consideration under a partial cash alternative capped at approximately £3.5 billion in aggregate, representing up to 25% of the total consideration available. Segro shareholders will also retain entitlement to the company’s 2026 interim dividend of up to 10.14 pence per share and a final dividend of up to 22.56 pence per share, both of which Segro intends to pay out prior to the deal’s closing. Based on Prologis’s share price and prevailing exchange rates at the time the final proposal was made, the offer values each Segro share at 1,031.7 pence.
Leadership Commentary
Prologis Chief Executive Officer Daniel S. Letter said the combination brings together Segro’s exceptional portfolio and customer relationships with Prologis’s global platform, operating expertise, and financial strength, adding that constructive engagement between the two companies’ leadership teams throughout the process had reinforced confidence in the opportunity ahead. As part of the transaction, Prologis will apply for a secondary listing of its shares on the London Stock Exchange, with regulatory approval of that listing serving as a condition to the deal’s completion.
A Deal Years in the Making
This is not Prologis’s first attempt to acquire Segro. The company had previously made an all-share proposal to acquire the British landlord back in March 2024, valuing Segro at £9.63 per share at the time, an offer Segro’s board rejected and publicly dismissed as “opportunistic.” The gap between that earlier rejected bid and this year’s successful £14 billion agreement illustrates just how significantly Prologis was willing to raise its offer to finally secure Segro’s backing.
Why Prologis Wants Segro
Prologis has framed the acquisition as an opportunity to combine Segro’s warehouse and logistics portfolio, along with its growing data center business, with Prologis’s substantially larger global platform and lower cost of capital. Segro has spent roughly two decades providing powered shells to data center customers, concentrated largely around Slough to the west of London, while Prologis has been rapidly expanding its own data center ambitions, with roughly 5.6 gigawatts of power either committed by utilities or in advanced stages of negotiation, and a target of reaching up to 10 gigawatts of capacity over the next decade. Prologis has argued that Segro trades at a persistent discount partly because it must make dilutive equity issuances to fund new development projects, a structural disadvantage the combined company’s larger balance sheet is intended to address.
Investor Reaction Was Mixed at First
The proposal drew a mixed response from Segro’s shareholder base during negotiations. Norway’s sovereign wealth fund, Norges Bank Investment Management, publicly expressed support for considering the combination, while asset manager CCLA Investment Management urged Segro’s board to engage constructively with Prologis. Not every investor was as enthusiastic, however, with M&G Investment Management arguing at one point that the price on offer remained insufficient given Segro’s standalone growth prospects, which the company had estimated could generate roughly £900 million in future rents and £4.1 billion in shareholder value through its existing development pipeline.
What Comes Next
The transaction is expected to close in the first half of 2027, subject to approval from Segro shareholders, sanction of the scheme by the court, applicable regulatory approvals, and other customary closing conditions. Notably, the deal does not require approval from Prologis’s own shareholders. With both boards now aligned behind the agreed terms, the coming months will focus on securing the necessary shareholder and regulatory sign-offs needed to complete what stands as one of the largest real estate acquisitions in recent European history.
